Egypt Signs Debt Swap Agreement with German Development Bank Worth EUR 54 Mn

Yesterday, the German Development Bank (KW) signed a debt swap agreement worth EUR54 mn on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) with the Egyptian Ministry of International Cooperation, Ministry of Electricity and Renewable Energy, and the Central Bank of Egypt, according to the German Embassy in Cairo's page.

This agreement exempts Egypt from repaying debts totaling EUR54 mn, which will be used to finance the transition to green energy in Egypt instead.

It is worth mentioning that the German government pledged during the COP27 international climate conference in Sharm El-Sheikh in November 2022 to contribute significantly to Egypt's water–energy–food nexus initiative (NWFE-EP). In line with this event, Germany has provided a total financing package of over EUR250 mn for the same purpose, including debt relief and highly concessional grants and loans.

The current debt swap supports the Egyptian government in achieving its goal of producing 42% of electricity from renewable energy sources by 2023 through financing the investments that pave the way for this important initiative.

The purpose of the project is to develop the transmission network to integrate renewable energies into the electricity grid and enhance the network. The project specifically contributes to the establishment of 2 substations and the connection of 2 wind farms (Amaymont farm and the Red Sea wind farm) with a capacity of 500 megawatts each to the national transmission network.

As a result, the Egyptian people and economy will be able to access optimized, cost-effective, and reliable energy supplies under an integrated renewable energy system, and the project will be implemented with the knowledge of EETC - Egyptian Electricity Transmission Company.